S&P beats expectations

The S&P (CME:ESM14) is trading slightly off of its fresh all-time high from yesterday’s session as it reached 1954.75. Inflation data out of China last night showed the quickest rise in the last four months as consumer prices rose 2.5% from the year earlier, beating expectations of 2.4%.

However, as the economy grows as the slowest pace in more than two decades, this is still shy of the 3.5% yearend target and still leaves room for further monetary easing measures to bolster growth.

Yesterday, China also lowered reserve requirements for banks hoping to see this help spark growth. Domestically, we will look to Redbook and Chain Store Sales to kick start the day as the 10 year Note (CBOT:ZNM14) Auction will be a major focus tomorrow. Major support in the S&P comes in at 1938 and this should present a solid buying opportunity upon the first test.

A close below this level though could signal a consolidation back towards the major 1917-1919 level as the week develops. Resistance still sits at 1947.75 and a continued close out above here is needed to keep this immediate term bullish momentum intact.

Crude oil (NYMEX:CLN14) started the week with a tremendous rally trading nearly $2 from the lows of the session. The market has continued to extend gains to new contract highs above 104.50. Data out of China of the last two evenings that showed a rising demand for crude oil and rising inflation year over year as well as recent actions to show a desire to stimulate growth in the world’s number 1 Oil consumer has encourage buying.

Furthermore, steady job growth here in the U.S. and a breakdown of talks between Ukraine and Russia to avert a gas cut-off has continued to help price action find a path of least resistance higher. Our first major three star resistance in oil has been above the 104.50 highs and comes in at 104.99-105.22, this area will provide headwind for a market that has rallied more than $3 in four sessions.

However, a close above here can cause a further breakout. Major support on the week will now come in at 103.65-103.85. The bulls need to see a close above the 104.50 level.

About the Author

Rich Ilczyszyn is Founder and Chief Market Strategist of iiTRADER.com. Rich excels at creating dynamic trading strategies for clients that establish solid positions, while remaining flexible enough to capitalize on market opportunities when they arise. By identifying market trends, breakouts, and failures in a timely fashion, Rich presents clients with the opportunity to realize their objectives while effectively managing their risk.

Rich is featured expert/trader and contributor on CNBC's "Futures Now" Show, and has been quoted in multiple of top-tier publications, including: The Wall Street Journal, Associated Press, Bloomberg News and Reuters.